The case of
Baldwin v. Hale (ante, p. <|68 U.S.
223|>223) affirmed.
Where negotiable paper is drawn to a person by name, with
addition of "Cashier" to his name, but with no designation of the
particular bank of which he was cashier, parol evidence is
allowable to show that he was the cashier of a bank which is
plaintiff in the suit, and that in taking the paper he was acting
as cashier and agent of that corporation.
The Bank of Newbury, a corporation, at the time of the suit and
now, established in Vermont, brought an action of assumpsit in the
Circuit Court of the United States for the Massachusetts District
against Baldwin upon a promissory note made by him in
Massachusetts, where he resided. The following is a copy of the
note. It was unendorsed:
"$3,500 BOSTON, Dec. 9, 1853"
"Five months after date I promise to pay to the order of
O.
C. Hale, Esq., Cashier, Thirty-five hundred dollars,
payable at either bank in Boston, value received."
"J. W. BALDWIN"
Page 68 U. S. 235
After making the note, and pursuant to laws of Massachusetts
existing prior to making it, Baldwin obtained a certificate of
discharge from his debts, embracing by its terms all contracts to
be performed within the State of Massachusetts after the passage of
said laws. The Bank of Newbury took no part in these proceedings in
insolvency in Massachusetts by which Baldwin obtained his
discharge. This discharge he pleaded in bar of the action on this
note.
He also pleaded the general issue, and under that plea objected
that the note declared on was not competent evidence to support the
declaration, and did not sustain the cause of action therein set
forth. On this point the case, as agreed on by the parties, was as
follows,
viz.:
"It is agreed that O. C. Hale was
in fact the Cashier of the
Bank of Newbury at the time of the making of said note, and in
case the court would admit such evidence after objection by the
defendant, and not otherwise, and not waiving his objection to the
same as incompetent, the defendant admits that said Hale mentioned
in said note, in taking said note was acting as the cashier of and
agent for the plaintiff corporation. If upon the foregoing facts
the plaintiff has made out a legal cause of action in his favor,
and the defendant's discharge &c., is ineffectual as a bar of
said action, the defendant is to be defaulted; otherwise the
plaintiff is to become nonsuit."
Two points thus arose and were argued:
1. Whether the contract, being by a citizen of Massachusetts,
was discharged by the proceedings in Massachusetts, even though to
be performed in that state -- Hale being a citizen, and the Bank of
Newbury being a corporation of Vermont, a different state.
2. Whether, if this discharge was not a bar, parol evidence was
admissible to show that "O. C. Hale, Esq.," described in the note
as "Cashier,"
simply, was cashier of the
Bank of
Newbury, the plaintiff in the suit, and that in taking the
note, he acted as the cashier and agent of the corporation.
The court below ruled that the discharge pleaded was no bar, and
also that the plaintiff had made out a cause of
Page 68 U. S. 236
action, and gave judgment accordingly. On error here the same
two questions arose.
Page 68 U. S. 239
MR. JUSTICE CLIFFORD, after stating the case, delivered the
opinion of the Court:
1. Two questions are presented for decision, but the first is
the same as that just decided in the preceding case, and for the
reasons there given must be determined in the same way. Contrary to
what was held in the case of
Scribner v. Fisher, 2 Gray
43, we hold that the certificate of discharge in the case was no
bar to the action, because the debt was due to a citizen of another
state. Such was the rule laid down in
Ogden
v. Saunders, 12 Wheat. 279; and we also hold that
the circumstance that the contract was to be performed in the state
where the discharge was obtained does not take the case out of the
operation of that rule.
2. Agreed statement also shows that O. C. Hale was in fact the
cashier of the Bank of Newbury at the time the defendant executed
the note, but the defendant insists, as he insisted in the court
below, that parol evidence was not admissible to prove that the
person therein named as payee in taking the note acted as cashier
and agent of the corporation. He admits that the plaintiff can
prove those facts, if admissible, but denies that parol evidence is
admissible for that purpose, which is the principal question on
this branch of the case. Counsel very properly admit that such
evidence would be admissible in suits upon ordinary simple
contracts, but the argument is that a different rule prevails where
the suit is upon a promissory note or bill of exchange. Suit in
such cases, it is said, can only be maintained in the name of the
person therein named as payee, and consequently that the plaintiff
bank cannot be treated as such without explanatory evidence, and
that parol evidence is not admissible to furnish any such
explanation. Suppose the rule were so, still it could
Page 68 U. S. 240
not benefit the defendant in this case, because it is
unconditionally admitted that O. C. Hale was in fact cashier of the
plaintiff bank at the time of the making of the said note.
Undeniably the note must be considered in connection with that
admitted fact, and when so considered it brings the case directly
within the rule laid down in the case of
Commercial Bank v.
French, 21 Pickering 486, and the several cases there cited
upon the same subject. In that case the court say the principle is
that the promise should be understood according to the intention of
the parties. If in truth it be an undertaking to the corporation
whether a right or a wrong name is inserted, or whether the name of
the corporation or some of its officers be used, it should be
declared on and treated as a promise to the corporation, and as a
general rule it may be said that where enough appears to show that
the parties intended to execute the instrument in the name of the
principal, the form of the words is immaterial, because as between
the original parties their intention should govern. But it is not
necessary to place the decision upon that ground alone, as we are
all of the opinion that even if the facts set forth in the agreed
statement are all to be regarded merely as an offer of proof,
subject to the objections of the defendant, still the case must be
decided in the same way. Regarded in that point of view, the
question then is whether the evidence offered was admissible.
Promise, as appears by the terms of the note, was to O. C. Hale,
cashier, and the question is whether parol evidence is admissible
to show that he was cashier of the plaintiff bank, and that in
taking the note he acted as the cashier and agent of the
corporation. Contract of the parties shows that he was cashier, and
that the promise was to him in that character. Banking corporations
necessarily act by some agent, and it is a matter of common
knowledge that such institutions usually have an officer known as
their cashier. In general he is the officer who superintends the
books and transactions of the bank under the orders of the
directors.
His acts within the sphere of his duty are in behalf of the
bank, and to that extent he is the agent of the corporation.
Page 68 U. S. 241
Viewed in the light of these well known facts, it is clear that
evidence may be received to show that a note given to the cashier
of a bank was intended as a promise to the corporation, and that
such evidence has no tendency whatever to contradict the terms of
the instrument. Where a check was drawn by a person who was a
cashier of an incorporated bank, and it appeared doubtful upon the
face of the instrument whether it was an official or a private act,
this Court held, in the case of the
Mechanics'
Bank v. Bank of Columbia, 5 Wheat. 326, that parol
evidence was admissible to show that it was an official act.
Signature of the promissor in that case had nothing appended to it
to show that he had acted in an official character, and yet it was
unhesitatingly held that parol evidence was admissible to show the
real character of the transaction. Opinion in that case was given
by Mr. Justice Johnson and in disposing of the case he said, that
it is by no means true, as was contended in argument, that the acts
of agents derive their validity from professing on the face of them
to have been done in the exercise of their agency. Rules of form,
in certain cases, have been prescribed by law, and where that is so
those rules must in general be followed, but in the diversified
duties of a general agent, the liability of the principal depends
upon the fact that the act was done in the exercise and within the
limits of the powers delegated, and those powers, says the learned
judge, are necessarily inquirable into by the court and jury. Maker
of the note in that case had signed his name without any addition
to indicate his agency, which makes the case a stronger one than
the one under consideration. Same rule as applied to ordinary
simple contracts has since that time been fully adopted by this
Court. Examples of the kind are to be found in the case of the
New Jersey Steam
Navigation Company v. Merchants' Bank, 6 How. 381,
and in the more recent case of
Ford v.
Williams, 21 How. 289, where the opinion was given
by MR. JUSTICE GRIER. In the latter case it is said that the
contract of the agent is the contract of the principal, and he may
sue or be sued thereon, though not named therein. Parol proof may
be admitted to show
Page 68 U. S. 242
the real nature of the transaction, and it is there held that
the admission of such proof does not contradict the instrument, but
only explains the transaction.
Such evidence, says Baron Park, in
Higgins v. Senior, 8
Mee. & Wels. 844, does not deny that the contract binds those
whom on its face it purports to bind, but shows that it also binds
another by reason that the act of the agent is the act of the
principal. Argument for the defendant is that the doctrine of those
cases can have no application to the present case, because the suit
is founded upon a promissory note, but the distinctions taken we
think cannot be sustained under the state of facts disclosed in the
agreed statement. Mr. Parsons says, if a bill or note is made
payable to A. B., cashier, without any other designation, there is
authority for saying that an action may be maintained upon it,
either by the person therein named as payee or by the bank of which
he is cashier, if the paper was actually made and received on
account of the bank; and the authorities cited by the author fully
sustain the position.
Fairfield v. Adams, 16 Pick. 381;
Shaw v. Stone, 1 Cush. 254;
Barnaby v. Newcombe,
9 Cush. 46;
Wright v. Boyd, 3 Barb. S.C. 523. Among the
cases cited by that author to show that the suit may be maintained
by the bank is that of the
Watervliet Bank v. White, 1
Den. 608, which deserves to be specially considered. Note in that
case was endorsed to R. Olcott Esq., cashier, or order, and the
suit was brought in the name of the plaintiff bank, of which the
endorsee was the cashier. Objection was made that the suit could
not be maintained in the name of the bank, but it appearing that
the endorsement was really made for the benefit of the corporation,
the court overruled the objection, and gave judgment for the
plaintiff.
Bayley v. Onondaga Ins. Co., 6 Hill 476.
Suggestion was made at the argument that the rule was different in
Massachusetts, but we think not. On the contrary, the same rule is
established there by repeated decisions, which have been followed
in other states.
Eastern R. Co. v. Benedict, 5 Gray 561;
Folger v. Chase, 18 Pick. 63;
Hartford Bank v.
Barry, 17 Mass. 94;
Long v. Colburn, 11 Mass. 97;
Swan v. Park,
Page 68 U. S. 243
1 Fairf. 441;
Rutland & R. Co. v. Cole, 24 Vt., 33.
Doubt cannot arise in this case that the person named in the note
was in fact the cashier of the plaintiff bank, because the fact is
admitted, and it is also admitted that the plaintiff can prove that
in taking the note he acted as the cashier and agent of the
corporation, provided the evidence is legally admissible. Our
conclusion is that the evidence is admissible, and that the suit
was properly brought in the name of the bank. The judgment of the
circuit court is therefore affirmed with costs.
Judgment accordingly.
